Valaris (VAL) AI Stock Analysis

• Market Cap: $2.58B
• Dividend Yield: N/A
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 8.5
• Beta (1Y): 1.15
• Revenue Growth: 30.82%
• EPS Growth: -62.91%
• Country: US
• Employees: 4,130
• Sector: Energy
• Sector Strength: 46
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): -0.53
• Shares Outstanding: 71,069,040
• 10 Day Avg. Volume: 1,500,078
• 30 Day Avg. Volume: 1,741,055
• PEG Ratio: -0.52
• Price to Book (P/B): 1.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.30
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 5.74
• Enterprise Value/Ebitda: 1.62
• 1Y Price Target: $42.00
• Price Target Upside: 15.77% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 76 Outperform
• Price Target: $41.00 ▲( 13.01% Upside)

Valaris showcases a strong financial recovery with robust earnings and cash flow, complemented by favorable valuation. Technical indicators are moderately positive, and the optimistic earnings guidance further supports the stock's potential. Macroeconomic challenges are present but mitigated by strong contract backlog and operational performance.

Valaris Business Overview & Revenue Model

Company Description

Valaris Limited (VAL) is a leading offshore drilling contractor, serving the global oil and gas industry. The company operates a high-quality fleet of modern offshore drilling rigs, including drillships, semisubmersible rigs, and jackup rigs. Valaris provides comprehensive drilling services to major international oil companies, national oil companies, and independent operators worldwide, delivering safe and efficient drilling solutions across various offshore environments.

How the Company Makes Money

Valaris makes money primarily through contracts for offshore drilling services. The company generates revenue by leasing its fleet of drilling rigs to oil and gas companies, which pay day rates for the use of these rigs. The contracts may vary in length, with some spanning months to years, providing a steady stream of income. Valaris's earnings are influenced by factors such as the utilization rates of its rigs, the prevailing day rates in the market, and the overall demand for offshore drilling services. Additionally, the company may engage in partnerships or joint ventures that can contribute to its revenue streams, although specific details of such arrangements are subject to change based on market conditions and strategic decisions.

Valaris Financial Statement Overview

Summary

Valaris presents a promising financial outlook with significant improvements across its income statement, balance sheet, and cash flow. The company has effectively turned around its profitability and financial stability. The income statement shows robust revenue growth and improving margins, while the balance sheet reflects a solid equity position and manageable leverage. Cash flow management has also improved with positive free cash flow. Despite previous challenges, Valaris is on a strong recovery trajectory, positioning itself well in the Oil & Gas Equipment & Services industry.

Income Statement

Valaris has shown a strong recovery with a significant improvement in its margins and revenue growth trajectory over the recent periods. The Gross Profit Margin has notably increased to 42.58% TTM, and the Net Profit Margin has turned positive at 12.61% TTM from a negative base in the past. Revenue growth is also robust at 5.48% TTM, indicating solid market demand. The EBIT and EBITDA margins have improved to 18.97% and 25.91% TTM respectively, reflecting better operational efficiencies. Overall, the income statement reflects a strong financial turnaround and growing profitability.

Balance Sheet

The balance sheet of Valaris shows a stable financial position with a manageable Debt-to-Equity Ratio of 0.49 TTM, indicating moderate leverage. The Return on Equity has improved significantly to 14.01% TTM, showcasing efficient use of equity capital. The Equity Ratio stands at 50.42% TTM, reflecting a solid equity base relative to total assets. Although the debt level has increased, the company has maintained equity growth, supporting financial stability.

Cash Flow

Valaris has demonstrated improvement in its cash flow management, with a positive Free Cash Flow of $81.54 million TTM, which is a notable turnaround from previous deficits. The Operating Cash Flow to Net Income Ratio is 1.56 TTM, indicating strong cash generation relative to net income. However, the Free Cash Flow Growth Rate is not applicable due to previous negative values, but the positive shift is a favorable sign of improving cash flow health.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.46B	2.36B	1.78B	1.60B	1.23B	1.43B
	Gross Profit
598.80M	479.60M	139.50M	128.10M	-66.00M	-584.00M
	EBIT
466.30M	352.30M	53.50M	307.10M	-902.00M	-4.33B
	EBITDA
637.20M	577.10M	254.20M	361.40M	-4.18B	-4.26B
	Net Income Common Stockholders
310.00M	373.40M	865.40M	176.50M	-4.49B	-4.86B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
509.10M	368.20M	620.50M	724.10M	608.70M	325.80M
	Total Assets
4.35B	4.42B	4.32B	2.86B	2.61B	12.87B
	Total Debt
1.16B	1.17B	1.16B	551.80M	545.30M	15.70M
	Net Debt
650.30M	799.40M	534.90M	-172.30M	-63.40M	-310.10M
	Total Liabilities
2.32B	2.18B	2.33B	1.56B	1.55B	8.50B
	Stockholders Equity
2.02B	2.24B	1.99B	1.30B	1.06B	4.37B
Cash Flow		Free Cash Flow
81.54M	-99.70M	-428.60M	-79.50M	-124.90M	-345.50M
	Operating Cash Flow
484.91M	355.40M	267.50M	127.50M	-66.00M	-251.70M
	Investing Cash Flow
-383.40M	-452.30M	-665.80M	-16.70M	-3.70M	-42.00M
	Financing Cash Flow
-157.00M	-158.30M	285.50M	-6.40M	388.70M	522.20M

Valaris Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 36.28
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VAL, the sentiment is Negative. The current price of 36.28 is below the 20-day moving average (MA) of 36.66, above the 50-day MA of 35.81, and below the 200-day MA of 46.04, indicating a neutral trend. The MACD of 0.61 indicates Positive momentum. The RSI at 49.75 is Neutral, neither overbought nor oversold. The STOCH value of 10.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VAL.

Valaris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TDW	78 Outperform	$1.95B	11.81	16.24%	―	19.34%	31.76%
VAL	76 Outperform	$2.58B	8.52	14.66%	―	30.82%	-62.91%
SDRL	71 Outperform	$1.43B	4.32	12.75%	―	-15.60%	32.51%
HP	66 Neutral	$1.54B	7.05	7.57%	8.67%	12.23%	-37.06%
RIG	60 Neutral	$2.20B	―	-6.65%	―	24.47%	-55.45%
Sector *	57 Neutral	$7.06B	3.07	-3.48%	5.79%	0.59%	-50.58%
PTEN	53 Neutral	$2.21B	―	-24.93%	5.59%	5.82%	-481.39%

Valaris Corporate Events

Valaris Increases Contract Backlog to $4.2 Billion

Valaris Limited, a company in the offshore drilling industry, reported an increase in its contract backlog to approximately $4.2 billion as of April 30, 2025, up from $3.6 billion in February 2025. The company secured new contracts and extensions, including a two-year contract for drillship VALARIS DS-10 offshore West Africa and a five-year extension for jackups leased to ARO Drilling in Saudi Arabia. Additionally, Valaris sold three semisubmersibles for recycling, generating $10 million in sales proceeds.